Madras High Court
V.Nixon Thambiraj vs )Arulantham on 29 August, 2018
Author: J.Nisha Banu
Bench: J.Nisha Banu
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED: 29.08.2018
(Reserved on 31.07.2018)
CORAM
THE HONOURABLE MRS.JUSTICE J.NISHA BANU
CMA(MD)No.212 of 2018
V.Nixon Thambiraj ... Appellant
vs.
1)Arulantham
2)Walter Daniel
3)Selvaraj
4)Devadass
5)V.Saroja
6)Rasaiyah
7)Antony Raj
8)Poomani Ammal
9)Arul Durai Raj
10)Willson.V
11)Chinnaiya
12)Suguna
13)Jeya.S
14)M.Kumarasamy
15)RukkuMani
16)Kalpana.N
17)Packiyalakshmi
18)Mangaiyarkarasi
19)Kala
20)Veni
21)Thiyagarajan
22)Irine
23)Robinson
24)Joseph Rajan
25)Roobavathy S
26)Revathy
27)Jesudass.D
28)Julius Jesudass
29)Sivasankara Nayar
30)Amirtha Rajani D
31)Rama moorthy
32)Siva Subrmanian
33)Arul Anandh
34)Arul Selvan
35)Mayandi.S
36)Martin Thana Singh
37)John Babu
38)SoundaraRajan J.P
39)Siva Durai.N
40)Chinnadurai
41)Ullaganathan
42)Ananthi S.N
43)JeyaJothiBai
44)ShunmugaVel
45)Susila.S
46)Aruputha Raj
47)Dhanasingh
48)Pitchaiyah
49)Samson Jo Dinakaran
50)Maheswari V
51)Sivagami L
52)Deivanayagam.V
53)Julius T.Stanis
54)PonJothi
55)Muthukumar
56)Mrs.Joy T George
57)Vellai Duraichi
58)Arumuga Nainar.V
59)Mrs.Racheal.R
60)Nirmal.R
61)Raja
62)Selvin Joel.G
63)Umapathy.T
64)Andrew.P
65)Sagunthala.V
66)Chandra Sekar
67)Jeevanantham Pastor
68)Jesu Paul Kirubakaran
69)Jemima MalarVizhi
70)Kannan
71)Manoharan
72)Rajendran
73)E.Govindarajan
74)Mr.Muthu
75)Silvia Swan
76)Mr.Issac
77)P.Stella Pushparani
78)V.Paulas
79)Yowan
80)VenkatesaPrabu
81)Mrs.C.Selvasundar Rao
82)MayilNathan
83)Rev.T.Samuel
84)Singh Rathinam
85)Ganesh.S
86)Lawrence.R
87)Ramesh Poornalingam
88)Billy Thomas
89)AlphacusJeyarani.S
90)ArseoBritto
91)Vasanthamani
92)I.RameshBabuji ... Respondents
(The respondents 3 to 6, 10, 12, 23, 29, 31, 36, 46, 53, 54, 57, 63, 66 to
69, 73, 74, 77, 80 to 82, 92 were set exparte in lower Court, hence notice
may be dispensed with)
Appeal filed under Section 75(2) of Provincial Insolvency Act, 1920,
against the fair and decreetal order passed in I.P.No.8 of 2016 dated
24.11.2017 on the file of the 1st Additional District Court, Tirunelveli.
!For Appellant : Mr.H.Arumugam
^For Respondent :
:JUDGMENT
This appeal is filed against the fair and decreetal order passed in IP No 8 of 2016 dated 24.11.2017, on the file of the First Additional District Court, Tirunelveli, on the petition dated 8.12.2016 filed under Sections 7, 10 (1) and 13 (1) of the Provincial Insolvency Act to adjudge the appellant/petitioner as insolvent.
2.The learned Judge, had after hearing the counsel for the appellant and some of the respondents represented in person and through counsels, dismissed the petition as not maintainable on the ground that it had no jurisdiction to enquire into the issue of Insolvency Petition as the appellant had conducted the business of a financial establishment as defined under Section 2 (3) of the TANPID Act, 1997 read with the non-obstante clause of section 6 (2) of the TANPID Act, 1997.
3.The appellant submits that the lower court had failed to exercise its jurisdiction under Section 3 of the Provincial Insolvency Act, 1920 on an erroneous conclusion that its jurisdiction is barred under the TANPID Act, 1997. It was submitted that the TANPID Act, 1997 cannot over ride the Provincial Insolvency Act, 1920 as it is a Central Act. It was also submitted that there is no provisions under the TANPID Act to provide for adjudication of insolvency.
4.It was submitted that the appellant's company had received money against promissory notes and not as deposits and therefore, they are only creditors and not depositors to attract the provisions of the TANPID Act. It was also submitted that the lower court had erroneously prejudged the jurisdiction issue even before all the respondents entered appearance or filed objections.
5.Perused the records. The Insolvency Petition is filed before the District Court on 08-12-2016. The petition was filed under the Provincial Insolvency Act, 1920. The appeal raises the precise question as to whether the District Court had jurisdiction to entertain Insolvency Petition filed by a person running a financial establishment Provincial Insolvency Act, 1920. The question is raised on account of the non obstante clause in Section 6 (2) of TANPID ACT, 1997 that reads as below:-
''SECTION 6 of TANPID ACT, 1997.
(1)For the purpose of this, the Government may with the concurrence of the Chief Justice of the High Court, by notification, constitute a special court in the cadre of a District and Sessions judge.
(2)No Court including the court constituted under the Presidency and Town Solvency Act, 1909 and the Provincial insolvency Act, 1920, other than the Special court shall have jurisdiction in respect of any matter to which the provisions of this Act apply.
(3)Any pending case in any other court to which the provisions of this Act apply shall stand transferred to the Special Court. (4)The special court shall, on an application by the competent authority, pass such order or issue such direction as may be necessary for equitable distribution among the depositors of the money realised from out of property attached.''
6.A cursory reading of the above indicates that there is no ambiguity that Section 6(2) of TANPID Act, 1997 is non-obstante, to exclude the jurisdiction of courts constituted under the Presidency and Town Solvency Act, 1909 and the Provincial insolvency Act, 1920 in respect of matters to which the TANPID Act, apply. The Acts appear neither inconsistent in their objects nor irreconcilable in implementation to import Article 254(1) of the Constitution of India to hold the state law void. And in the instant case, there appears no repugnancy between the Central Acts and the State Acts to remotely suggest that one over rides the other.
7.A holistic reading of the TANPID Act, 1997 indicates that the solvency of a financial establishment and its promoters are more fairly tested and adjudicated in a proceeding under the TANPID Act than the Central Acts in as much as the empowered State and the duped depositors can more actively participate in the proceedings under the TANPID Act, 1997. Therefore, it is incorrect to say that there is no adjudication provisions under the TANPID Act, 1997. Therefore the appeal does not succeed.
8.Interestingly, the above Central Acts viz., the Presidency and Town Solvency Act, 1909 and the Provincial insolvency Act, 1920 stand repealed with effect from 28-05-2016, by virtue of Section 243 (1) of the Insolvency and Bankruptcy Code, 2016. The new Insolvency and Bankruptcy Code have brought the insolvency and bankruptcy laws of India under one umbrella conferring adjudicatory jurisdiction to the Debt Recovery Tribunal in cases of individuals and firms and to the National Company Law Tribunal for Companies covered under the Company Law. However, it could be seen that the Insolvency Petition came to be filed only on 08-12-2016 before the First Additional District Court under the repealed Act. Therefore, I do not find any infirmity in the order passed by the learned Judge in I.P.No.8 of 2016 dated 24.11.2017 on the file of the 1st Additional District Court, Tirunelveli, and it does not warrant interference from this Court.
Accordingly, this Civil Miscellaneous Appeal dismissed. No costs.
To The 1st Additional District Judge, Tirunelveli.
.